Still Think Streaming is Not Important?

Online streaming has been the quiet partner in the audio delivery realm, although we have talked about it since the late 1990s. Some stations have streamed all this time, while others have come and gone; and some have come back.

From a business point of view, streaming’s challenge is its profitability (or lack thereof so far). The complex and comparatively expensive royalty issues alone discourage many from pursuing it. The bandwidth costs of the one-to-one transmission (rather than the one-to-many system of broadcast) are also a challenge. The more popular your stream becomes, the more expensive it is to deliver.

Through all this, there are those who maintain that streaming is just not worth the effort. If that’s the case, why are online services so omnipresent? Pandora, Slacker, iHeartRadio and others maintain visibility in the news, in social network circles and even our own industry press. How many sessions at conventions include some mention of if not a total focus on streaming? For an activity that’s not that important it sure has a following.

For Pandora, Slacker and others, online is their only game. Unlike iHeartRadio and CBS Interactive, which have established broadcast brands to fuel their efforts, the online-only crowd has to make it solely on their online efforts. Streaming is not a value added, it’s their asset.

In July, Clear Channel’s iHeartRadio made a splash about adding more Pandora-like features to its app. That’s good for iHeartRadio, but also a push for Pandora (which also recently gained public investors). We know the saying about imitation being the highest form of flattery.

Clear Channel has planned a huge Las Vegas event in September to kick-off the new features. As the event approaches we’ll hear more about it, but we’ll also hear more about listening to streams online. It seems streaming is important again.

While radio likes to downplay the role of online-only streamers, they should still be watched. As I noted earlier, streaming has its downsides, but the number of consumers carrying some kind of connected device continues to grow. While the NAB pushes to have FM included in all cell phones, broader online choices continue to grow. (I should note that this entire discussion relates to streaming in general. The debate of streaming vs. over-the-air broadcasting during emergencies and times of high data traffic are not the norm. Over-the-air has certain advantages at certain times, but this is all about the routine use, not emergencies.)

What’s the appeal of Pandora? The new features of iHeartRadio seem to answer that. Listeners can access various stations online of course, but they can also create their own custom stations based on their listening preferences. Clear Channel says its new service will also add non-audio features such as song lyrics, contests and locally targeted news updates. Localism added to an Internet stream? Gee, that sounds just like … radio.

Clear Channel also says it won’t need to make money from the new service. I find that hard to believe. A business is created to make money in some way. According to an iHeartRadio statement, the service will be successful if it helps Clear Channel reach audiences in different ways. There’s merit to that idea; extending the reach and reinforcing the brand is a good thing. But if it’s not adding something to the bottom line I don’t see the practice continuing forever.

Radio stations have one advantage in streaming: They already know how to create an audio stream to a target audience. And while anyone has yet to really find the hook in making streaming a profitable venture, it has the advantage of furthering a station brand. It also keeps a station relevant in the eyes of the online listener.